More than twenty years ago, I developed a powerful approach to negotiating that goes beyond “win-win.” It involves starting by offering the most and asking for the least. It works extremely well, but I was unable to explain why until I read Wharton professor Adam Grant’s excellent new book Give and Take.

Adam identifies three types of people: Takers try to get as much as possible from others, matchers seek an even trade, and givers contribute without expectation of return.

Previously, I’d thought of things more in terms of debt and honor.

My parents raised me to believe that borrowing and then not returning is the moral equivalent of stealing. Put in the language of giving and taking, borrowing is a form of taking where I get what I want now and put my honor at risk in the future. Repaying my debt later only elevates me to the status of matcher, but not giver.

Eventually, I came to see that getting paid a salary in advance of delivering value is a form of debt. In 1992, I accepted a job that came with a bonus guarantee. Almost immediately, the unit I worked for was disbanded and they paid both the guarantee and a severance. It was the first time in my career that I was paid more than I delivered, and I felt I was left with a debt I could never repay. That is when I changed how I negotiate contracts.

The typical approach is for both sides to demand something unreasonable—but not let on that they consider it unreasonable—and then negotiate a “compromise” in the hopes that you will end up closer to your side than the midpoint. Even when the final agreement is declared a “win-win,” this approach backfires because it begins with acts of unreasonableness, selfishness, and distrust.

The next time I had to negotiate a contract, it began in typical fashion with a prospective employer sending me a lopsided agreement and asking me to counter-propose. I said I was incompetent to do that and suggested they write a new contract as if they were me, putting in everything that would be in my best interests, and then taking out everything they would never agree to. Since that would be the best I could get, I would accept it subject to agreement on compensation.

We started with base pay. I wrote down the least I would work for and asked them to write down the most they would offer a perfect person, irrespective of whether I was that person or not. If when we exchanged papers, their number wasn’t higher than mine then we could stop there and save time. Their number was twice the best base pay I had ever received in past jobs, and my request was for $0. I explained that my goal is to live a debt-free life, and therefore I wanted to give value before receiving compensation. Continue reading “The secret to a higher salary is to ask for nothing at all”

This catches the students off guard and after batting the question around for a bit someone says, “To find my passion.” The rest agree and they imagine they are done with the topic.

But I am not done with them.

I ask them to define “passion” because if you cannot say what a word means then you are shooting the shit rather than answering a question.

So they discuss that for a while longer and eventually settle on some variant of, “I don’t know what passion is but I’ll know when I have passion for my work because I won’t have to motivate myself to do it.”

“Really?” I say, “Where I come from we have a word for that, and it is ‘like’ as in ‘I like my job.’ But I know I am passionate when I do something even though I hate every second.”

“Why would anyone do a job they hate?” someone asks.

I want to say, “It might be because you have bills to pay and you don’t want to live off your parents or the state.”

But, instead I say, “I don’t know. Why did my dad lie about his age so he could enlist a year earlier than allowed by law to become a paratrooper and jump out of airplanes while the Japanese shot at him? That was something he hated to do, but he did it anyway, and he did it because of something called passion.”

I went to college in 1970. By 1974 I had a degree in mathematics and experience hitchhiking to every state of the union except for Alaska and Hawaii; perhaps 30,000 miles in all.

I learned more about how to live from those experiences than anything I learned in a school. Here is the story of what I learned from a man in the pick-up truck who took my girlfriend and me from central Minnesota to just west of Fargo, North Dakota.

Had I not learned this lesson my life would have been very different; not only would I have been much less inventive I would not have had the courage to stand up to some of the shenanigans I saw during the 30 years I was on Wall Street.

I’ll call him Jeb. I don’t remember his name, but during Prohibition he used to bootleg whisky, so Jeb sounds like a good bootlegger’s name, don’t you think?

Jack Rieur was the most wonderful teacher I ever had and perhaps the best teacher anywhere on the planet and for all time. I first met him in 1963 when he was my 6th grade teacher and we have kept in touch ever since.

Sure, he covered the state mandated syllabus, but what he really taught was that the world was something we go out and live in and not read about in the classroom. And learning was fun; the most fun you can ever have. And if you pay attention you can learn from life itself and the point wasn’t that there was a test at the end of the semester but later in life you had to teach others because the human race is not a race to the finish but a relay race where near the finish line we must pass the baton.

For example, he taught geography not from the book but from the slides he took personally when he visited all the places in the book. Here is a picture I took of him back when he was a spry 89-year-old in front of the 79,662 slides he used in practicing his craft and that have since been digitized and stored by the Archives at the Consortium Library. I have been to more than 40 countries so far and have set up housekeeping in a few (and I’m no where near done). Had I not had him I might have run the risk of having gone to Canada once and seen a few other countries for a few hours each on a cruise.

He died this last August but his spirit lives on in me. For example he came to my rescue just now when I was stuck writing one thing and I got unstuck by writing something else.

Mr. Rieur’s other name was Jack but he insisted his sixth grader’s call him Mr. Rieur. It was not a matter of respect for age but of class. You only got to call him Jack if you became a teacher too. Well I have approached raising my children and managing my businesses and all my writing as a teacher, and so I think I have earned the right to call him Jack posthumously. However if you have done none of those things then please call him Mr. Rieur out of respect.

How to write if you cannot concentrate.

People tell me that they cannot concentrate long enough to write anything coherent that isn’t trite or a cut-and-paste job of things off the web, which doesn’t count anyway.

Ask yourself this question, “What do employers owe the people they do not hire?” I asked myself that question more than a decade ago and it changed my life forever.

On Sunday, January 18, 2004, I ran a help-wanted ad in the New York Times that read in its entirety, “Programmer – Will train, enjoyment of mathematics a plus” followed by an email address. I was heading a statistical arbitrage trading desk and I needed help maintaining all the code I’d written.

I was surprised to get more than 300 resumes and because nobody had experience in the language we use (APL), and I could not gauge learning potential from a resume, I sent everyone a link to a 500-page manual (latest version available here), and I suggested applicants try their hand at a half-dozen puzzle questions they could easily answer in this language.

Thirty-eight people answered the questions so I invited them in for an open house. I had them sit on our trading floor for a bit where they played a game I’d written called BF Game that simulated an information market. We talked about the technology and the nature of our work and then I asked them what they thought I should do next.

Twenty-seven of the applicants suggested I teach them all first and then make a hiring decision, so I ordered tables and chairs that arrived the next day. And the day after that we built a classroom.

A friend gave them two days of formal training in APL and then I left them alone for three weeks with some pretty difficult problems. These included the automation of investment, liquidation, and index arbitrage strategies in BF Game, and the creation of a Bayesian statistical technique for analyzing the words in Tom Sawyer so as to calculate a probability that a given passage comes from Huckleberry Finn.

Within a week they’d created an on-line community on Yahoo with 73 members who volunteered to help them with their project including an out-sourcing company in St. Petersburg, Russia, that sent all their training materials (in English), an author in England who sent a draft of a forthcoming textbook, and numerous trading experts who helped them develop strategies. These eager students opened my eyes to a new way of collaboratively solving problems.

Three weeks later the class had met all my challenges and now I had two problems:

How do I pick someone to hire?

How do I help the people I don’t hire?

I brought my candidates in asked one question, “If you were me and you could only hire one person and it could not be you, who would it be?” It was fairly unanimous and so I made offers to Orlando and Onyema.

Then I rented a ballroom in mid-town Manhattan and invited everyone from the APL community to meet the 11 of my students who had made it to the end. More than 50 people from as far away as California and England attended and a number of my students were offered work elsewhere.

This unplanned experience taught me that if you care about people they will care back, and with just a little bit of encouragement most people will eagerly learn what you need them to know. I generalized this approach to hiring not only for technical people but also for a wide range of jobs. Hiring in this way has helped hundreds of people learn new things, been instrumental in helping dozens of unemployed people land jobs elsewhere. I wrote about how to do it for Science Careers and Quartz, and other employers who have adopted the same approach have reported spectacular results.

So, here is my answer to the question, “What do we owe the people who we do not hire?”

Information on where they stand.

An explanation of what they are doing wrong.

Help improving.

Changing how I hire has been the most satisfying thing I have ever done in my entire professional career. What about you? What do you think employers owe those they do not hire, and how can you help?

On February 10, 2014, shut down my business unit and retired from Wall Street, and then I created BetterWorkWorld.com to help employers find better ways of hiring people and treat them after they do. Check it out.

Me: I am a retired Wall Street trader, hedge fund manager and programmer. I put ideas into words and code, and sometimes into action. Purpose:I want to act so as to earn the gratitude of generations as yet unborn. Creed: To care. If I care I can figure out the rest and if I don't care then it doesn't matter. Ethical Code: Tell the whole truth. See my: Disclosure and Values.